I wouldn't buy a new car.

If you're smart (about money, anyhow) neither will you.

It's been said that, adjusted for income, today's cars don't cost more (or significantly more) than the cars of the "good old days" - back in the '60s and '70s - once you adjust for inflation.

And that may be true.

But what many people forget to take into account is that the peripheral costs of new car ownership are much high today. In particular, in states where there are personal property taxes on motor vehicles.


In my home state of Virginia, for example (and in the other states that have taxes of this kind) a $40,000 SUV can cost you hundreds of dollar each year in personal property taxes. Over five years - the typical new car loan period - this can amount to several thousand dollars.

That's fine, if you can afford it - and don't mind paying it. But on the other hand, you could have bought a five or six-year-old economy car for the amount you'll spend just n property taxes for that high-dollar new car. Plus, the used economy car won't lose half its value during the first three or four years you own it - as most new cars will.

Property taxes are very much a part of the true cost of any new car, whether they're listed on the MSRP "sticker" or not. Trouble is, many people do not take them into account when they go shopping.

Insurance is like that, too.

Many people forget that they will have to find and pay for a full coverage policy (assuming they took out a loan for the car) and that the cost to insure a brand-new car vs. what they were driving before could be much higher, simply by dint of the fact that the coverage will reflect the replacement cost of the brand-new vehicle.

As with property taxes,it's important to factor the cost of insurance into the total cost equation. Buy something a few years older and you insurance costs will usually be lower - especially if it's a paid-for older car and you can skip comprehensive coverage in favor of a basic policy that does not include collision coverage. This is a sensible thing to do with an older car because often the cost to repair it after a major wreck will be too close to the total retail value of the vehicle - in which case the insurance company will likely "total" the car (if you had comprehensive/collision coverage) and give you a check for the current market value rather than fix it. You're better off just putting the money aside, going with the minimal coverage - and paying for minor fender-benders out of pocket.

The final thing about new cars to keep in mind is repair/maintenance costs. While it's absolutely true that modern cars are (overall) much better-built and far more reliable than the cars of the '60s and '70s, it's also true that when something does go wrong, it can be a lot more expensive to repair. A couple of catalytic converters and new O2 sensors, for example, can be $500 or more - just for the parts. That amount of money would have bought you a complete exhaust system - installed - back in the '70s.

And minor parts like headlamp "assemblies" (as opposed to old school just-plain headlights) on new cars can have prices that will absolutely floor you. Night-time illumination is probably 100 percent improved, now vs. then - but the price of progress isn't low.

The one saving grace here is the new car will be under warranty, so whatever breaks will be someone else's problem (at least insofar as the money is concerned). But the warranty only lasts so long. When time's up, you're the one holding the bag. Buy a used car and all that money you saved up front and on property taxes/insurance will be on hand to cover whatever falls apart of just quits working. You'll still come out way ahead.

There's a reason why so many guys like me who make their living writing about new cars very often only drive used cars ourselves.

It's not that we're poor. It's that we're wise to the game.

You can be, too.